PEER-TO-PEER lender Growth Street has confirmed plans to cut approximately 30 per cent of its workforce as it moves from a hybrid origination model to a digital-only model.
The platform told Peer2Peer Finance News that the changes are a part of Growth Street’s new business strategy, which will change the way the firm sources its loans.
Financial News, which first broke the news of Growth Street’s restructure, said that rather than relying on a ‘boots-on-the-ground’ approach, Growth Street will focus on marketplace-led originations via its existing partnerships with digital accountancy firm Xero and challenger bank Starling.
“After extensive analysis and consideration, we have, unfortunately, decided to move away from a hybrid origination model, which includes both traditional and digital business development,” Greg Carter, chief executive of Growth Street, told Peer2Peer Finance News via email.
“As a result of this pivot, there will be redundancies in the business. This is not a decision we have taken lightly and we want to thank those affected for their service to Growth Street.”
Carter added that staff have been informed of the job cuts, and added that the company will do all it can to provide roles within the company to those who have been informed their role is at risk. “Where this won’t be possible we will be making every effort to support them in their transition,” Carter said.
The restructuring comes after the platform told investors that two loans worth more than £1m each had entered default.
“The two loans that defaulted were a manufacturing firm and a construction equipment rental business,” said Carter. “Both were affected by the ongoing slowdown in manufacturing, construction and the economy as a whole in the UK.
“In terms of the measures put in place, the cost of the two defaults have been taken onto the company’s balance sheet to protect investors from being exposed to losses from these two facilities and to allow Growth Street the time and flexibility to maximise recovery.”